Linearity Assumption Check

A simple scattered plot between the dependent and the independent variables will provide the visual representations if there is any problem in the data such as any relationships other than linear (assumption # 1) and any potential unusual observations (assumption #2).

The first assumption of a linear regression analysis is the linearity of the data. This assumption can be simply checked using a scatter plot in MS Excel. The scatter plot with a trend line will show the linearity of the data (Figure 6). Moreover, the scatter diagram in MS Excel has an option to show the regression equation with the r-square value. The scatter plot in Figure 6 clearly shows that the left data set has a potential linear relationship, while the right data set has a perfect nonlinear relationship. Therefore, performing a linear regression analysis on the right data set will be inappropriate.